White Paper on White Paper on I i l E d T d 2009I i l E d T d 2009International Economy and Trade 2009International Economy and Trade 2009

(Summary)

June ２００９Trade Policy BureauTrade Policy Bureau

Ministry of Economy, Trade and Industry

2009 White Paper on International Economy and Trade “Global Economic Strategy of Converting  Crisis into Opportunities”

Ch t 1Chapter1The Global Economy Facing Challenges, its Current Situation and Issues … １４

3. Converting crisis into opportunities～ ①Market exploration of Asia and emerging economies

1. The increased amount of global money under management and the collapse of its management in U.S. as the background of the global financial crisis

2 I t d b th fi i l i i th l b l fl i

… ４

… １５

economies

4. Converting crisis into opportunities～ ②Appealing for Japanese attractive points to the rest of the world

2. Impacted by the financial crisis, the global economy flying on two engines of the advanced countries and emerging economies is now forced to fly on a single engine, that of the emerging economies

… ５ … １６5. Converting crisis into opportunities ～ ③Developing the future by expanding domestic demand

Ch t 33. How were economies affected? Three patterns were identified

4. Economic measures of each country for today’s global

… ６

… ７

Chapter3 Global Economic Strategy and Foreign Economic Policy of Japan

y y grecession

5. Economic measures of each country /regions in terms of effects

Chapter2

… ８

… １９

… ２１

1. Domestic and foreign integrated economic measures

2. Promotion of innovation in the “Volume Zone” Chapter2Direction of Japanese Economy in the Global Economic Crisis

1 Th l t i l d b t １１

… ２２

… ２３

3. Global development of the low carbon revolution

4. Multi-layer cooperation including industrial cooperation with countries rich in natural resources

1. The longest economic recovery was led by exports.

2. Background to the economic downturn : Industrial structural change toward high value-added

production

… １１

… １２

Chapter 1Chapter 1The Global Economy Facing Challenges, its C t Sit ti d ICurrent Situation and Issues

１．The increased amount of global money under management and the collapse of its management in U.S. as the background of the global financial crisis○Money under management including US pension funds and other advanced countries / foreign exchange reserves of the emerging countries increased globally.○This money mainly flowed into residential mortgage-backed securities (RMBS) in the U.S. forming a housing bubble The collapse of the bubble triggered a global financial crisisforming a housing bubble. The collapse of the bubble triggered a global financial crisis.

Global money under management doubled in 5 years

Surge in US residential mortgage-backed securities

8.9

8

9Residential Mortgage‐Backed Securities(1)

bonds

government bonds(2)

（$ trillion）

27.1 97 

110 

100

120（$trillion）

private

Doubled in5 years.

Amount of Debt Securities Outstanding Issued in the U.S.

$2 trillion+ increase in 1 100

120111

（$trillion）

6.56.0

4.9

4 2

5

6

7MMFs(3)

agency bonds(4)

municipal bonds(5)

asset backed securities

74.3 20.5 22.2 

24.8 

59  58 59  57

68 74 

82 80

privatewealth year.

48 80

equities

4.2

2.9

1

2

3

4

49 053.8 

65.2 

17.0  18.0  17.5  17.8 

19.0 58  59 57 

40

60pension, insurance,mutual fund 

63

40

60

debt securities

0

1

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Note：(1) refers to residential mortgage‐backed securities collateralized by claims on mortgages(RMBS) issued by Fainnie Mae,  Ginnie Mae, Freddie Mac .(2) refers to commercial Paper, bank acceptances and large time deposits etc.

（year）

2.7 6.2 

40.1  37.7  38.2  36.0 45.1  49.0 

0

20

foreign reserve

0

20

0.2( ) p , p g p(3) refers to securities issued by governmental agencies established to facilitate loans to students, homeowners or farmers (excl. (1)).(4)  refers to securities issued by States, Cities or Countries for their funds raising.(5)  refers to securities collateralized by claims on  auto loans or credit cards. 

Data： SIFMA（http://www.sifma.org/research/pdf/Overall_Outstanding.pdf）.

99 00 01 02 03 04 05 06 07

Note： 1.  Foreign reserve excludes gold. Other money: Total of Private Equity Fund and Hedge Fund.  2. Debt securities and stocks are total of US, Canada, UK, France, Germany, Italy, Netherland, Swizterland, Japan, Australia, Singapore and  Hong Kong.  3. Pension, insurance, mutual funds, private invetsor money and other money are mainly consisted with advanced countries and do not indlude ones for emerging countries.Data： International Financial Services, London; CBS Fund Management 2003‐2008.

other money

4

07other money

２．Impacted by the financial crisis, the global economy flying on two engines of the advanced countries and emerging economies is now forced to fly on a single engine that of the emerging economiessingle engine, that of the emerging economies○ Financial crisis hit Main Street causing a worldwide decline in asset values and consumption caused by the worldwide credit crunch. ○ China India (and Middle East/Africa) have continued to maintain growth while all○ China, India (and Middle East/Africa) have continued to maintain growth while all the advanced countries marked negative growth, the first time for this since WWII.

Japan Marked the Biggest Drop in Investment money doubled globally over 5 years p gg pExport Among the Major Countries.

Growth rates of exports in goods to the world market of major countries

y g y y

‐ horizontal axis: GDP composition ratio of each country（red）‐ vertical axis ：ForcastedGDP growth rate 2009  (black)*Dashed line shows the annualaverage growth rate

(GDP growth rate) 11.3%9.1%

7.3%（year‐to‐year basis %）Dashed line shows the annual average growth rate.

Demand in Advanced Countries to diminish

Ch

5％

6.5％

4.5%

4.6%5.9%

4.5％Middle East

5.9%6.2%

20 

40 

60 （year to year basis, %）

Cou es o d s hIna

India25 2％ 22 4％ 8 0％ 5 1％ 8 8％

2.62 4％ GDP

2.8%2.4% 2.3%

2.7%3.0%

2.5％Africa2.0％

Other Emerging Countries

2 0％ 8 4％China ‐24.5% 

EU15 ‐22.5% Thailand  ‐16.6% 

Korea 8.5%

‐20 

0 

USEuro Area

Japan

a

UK

Other Advanced Countries

0％ASEAN5

0.0％World Total：- 1.3%

25.2％ 22.4％ 8.0％ 5.1％ 8.8％％

6.2％ 2.0％

2.4％

2.4％

GDP composition ratio

Brazil-1.3％

2.0％2.5％

2.0％ 8.4％

Germany‐23.7% 

Japan ‐39.1% 

‐60 

‐40 

nuary‐08

ruary‐08

March‐08

April‐08

May‐08

June

‐08

July‐08

ugust‐08

mbe

r‐08

tobe

r‐08

mbe

r‐08

mbe

r‐08

nuary‐09

ruary‐09

March‐09

April‐09

51

-5％- 2.8％

- 4.2％ - 4.1％Canada- 2.5％

- 4.1％

Russia-6.0％

BRICsTotal

12.8％- 3.3％ Data: “IMF World Economic

Outlook April, 2009”, “Economic Outlook”, Cabinet Office, Government of Japan.

Jan

Feb M Au

Septe

Oc t

Nove

Dece Jan

Feb M

Note： Local currency basis.Data： World Trade Atlas.

３．How were economies affected? Three patterns were identified

Credit Bubble Type

U S UK S i I l d

Export-led Type

J G

“Booming Emerging Countries”

Middle/East Europe

Features b

the crisis

House Price Increase Rate Net External Position vis-Export Dependency（＊2）

U.S., UK, Spain, Ireland, etc.

Japan, Germany, S. Korea, Singapore,

etc.

Middle/East Europe Countries, etc.

before

（＊1）

U.S.：Spain：UK

à-vis Banks（＊3）

Estonia： ６８．８％Latvia： ５７．６％

p p y

Singapore： 230.9％Germany： 46.7％

１２．６％１２．６％１１ ８％UK：

Ireland：Hungary： ５０．２％Romania： ３２．５％

S. Korea： 46.4％Japan： 17.6％

１１．８％１１．６％

Sharp decline in domestic consumption due to collapse of housing

Great decrease in exports due to sharp decline in demand in

Sharp decline in money inflow from overseas due to the economic

Situatio

crisis

collapse of housing bubble and the turmoil of domestic financial system.

decline in demand in advanced countries such as the U.S.

due to the economic recession in the Western European countries

on after the

＊1: Average increase rate from Jan 2003 to the month of the peek.

6＊3：Net external position vis-à-vis banks/nominal GDP×100（as of Sep. 2008）

＊2：Value of export of goods and services/nominal GDP×100（ 2007）

countries.

４．Economic measures of each country for today’s global recession

○ Major countries took large-scale economic measures as well as a variety of○ Major countries took large-scale economic measures as well as a variety of financial stability measures.○ Confirmed total of $5,000 B (approx. ¥500T) of public spending by the participating countries at the April 2009 London Summit.participating countries at the April 2009 London Summit.

UK£2 8B

Korea81trillion Won

ＥＵ400 B Euro

£2.8B（ ¥ 0.4T)

GDP ratio: 0.2 %

G China

（¥6.4 T)GDP ratio: 8.0%

U.S.

（¥54.9 T)GDP ratio: 3.3%

JapanGermany

85.5B Euro（¥11.8 T）

GDP ratio:: 3.4%

China4 T RMB（¥58 T)

GDP ratio: 13.3%

U.S.US$ 787.2 B（¥77T)

GDP ratio:5.5%

FY 2008 revised budget etc.※

（¥75T） GDP ratio: 14.8%FY 2009 revised budget（¥57 T） GDP ratio :11.2%

France36.4B Euro（¥5 0T)

（¥57 T） GDP ratio :11.2%

（¥5.0T)GDP ratio:1.9%

AustraliaAU$ 52 4 B

※: The budget and the tax reform in 2009 fiscal year(¥37T) are included.

N tAU$ 52.4 B（¥4.1 T）

GDP ratio:4.4%Data： Various Media.

Note:- Values for the U.S., France and the UK are the total amounts of public spending and tax cuts.- Values are project scale excluding the U.S., France and UK.- The E.U. includes the UK, Germany and France. 7

５．Economic measures of each country /regions in terms of effects ①○ Thanks to large-scale economic measures, global stock prices have at least bottomed outbottomed out

4,500 

5,000 US（NY Dow Average）（$）

9.15 Lehman Bros. bankrupt

$4,569（May 2008） 6,500 

7,000 UK Stock Price Index（FT100 index）（point）

6,376 point（May 2008）

9.15 Lehman Bros. bankrupt

3,500 

4,000 

,3.23 US announces purchase of nonperforming loans of US financial institution.

$2,985（June 2009）△52％ 4,500

5,000 

5,500 

6,000  3.23 US announces purchase of nonperforming loans of US financial institution.

4,453 point（June 2009）

△

2,000 

2,500 

3,000 

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

$2,195（March 2009）

52％

3,000 

3,500 

4,000 

4,500 

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

3,512 point （March 2009） +15%

△45％

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

2008 20091 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

20092008

15,000 

16,000 Japan（Nikkei Average）

¥14,489（June 2008）

（¥）

9.15 Lehman

Bros. bankrupt

2,000 

Korea（KOSPI Index）（point）

9.15 Lehman Bros.

bankrupt

1,889 point（June 2008）5,500 

6,000 

China （Shanghai SE Composite Index）

5,498 point（Jan 2008）

（point）

3.23 US announces purchase of nonperforming  loans of US 

10 000

11,000 

12,000 

13,000 

14,000  3.23 US announces purchase of nonperforming  loans of US financial institution.

¥9,768（June 2009) 1,400 

1,600 

1,800  3.23 US announces purchase of nonperforming loans of US financialinstitution.

1,395 point（June 2009）

3 000

3,500 

4,000 

4,500 

5,000 （Jan. 2008）

9.15 Lehman Bros.

bankrupt

financial institution.

2,754 point（June 2009）

6,000 

7,000 

8,000 

9,000 

10,000 

¥7,055（March 2009）

△51％

+18%800 

1,000 

1,200 

939 point（Oct. 2008） +24%

△50％

1,000 

1,500 

2,000 

2,500 

3,000 

1,707 point（Nov. 2008）

+19%

（ ）

△69％

8Data：Bloomberg. Negative percentages show the ratios of the bottom prices against the recent peak prices in 2008 , and positive percentages show difference between the ratios of latest prices(Jun 2009) and the bottoms.

1 2 3 4 5 6 7 8 9 10 1112 1 2 3 4 5 620092008

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 62008 2009

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 62008 2009

５． Economic measures of each country / regions in terms of effects ②○ Economic measures of each countries to gradually stimulate downturned consumption.

◆Germany（passenger automobile ）◆Japan（automobile）

consumption.○ For Instance , in Japan and Germany, tax reduction and subsidies for automobile purchase worked positively for automobile sales to a certain degree.

39.9% 39.7%45%50 

（ten thousand units） （year‐to‐year basis）year‐to‐year basis（right scale）

10%

70

80

（ten thousand units） （year‐to‐year basis）year‐to‐year basis（right scale）

◆ y（p g ）◆ p （ ）

April  2009,  Jan. 2009,i t d ti f

30%40 260 thousand units

390 thousand units

480 thousand units

3.6%

0%60

70 pintroduction of tax cut.

introduction of subsidies.

0%

15%

20 

30 units

290 thousand

‐10%40

50

‐15%10 

290 thousand units

‐19.0%‐20%20

30

Decline of sales to stop.

20‐40%sales increase on year‐to‐year 18%

‐30%0 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5

Sales Unit‐25.3%

‐30%0

10

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5

Sales Units

year to year basis.

-18%

2008  20092008  2009

9Data：Japan Automobile Manufacturers Association. Data: Association des Constructeurs Europeens Automobiles （ACEA), Association

Auxiliaire de l‘Automobile. (Figure of May 2009 from The German Association of the Automotive Industry(VDA)).

Ch t 2Chapter 2

Direction of Japanese Economy in the Global Economic Crisisin the Global Economic Crisis

１．The longest economic recovery was led by exports.○ From 2002 to 2007, Japan’s economy experienced the longest recovery after , p y p g yworld war II, led by exports.○ Japan’s export dependence increased in the 2000’s and became the highest in 2007.

Comparison of Demand Components in Recovering Periods

Consumption grew sluggishly. Exports grew rapidly. Recently Japan’s export dependence increased rapidly, though it is lower than those of other countries.

170

180

1986～1991外需が

景気回復を主導（バブル景気）

Comparison of Demand Components in Recovering Periods

Japan’s  export dependence(exports/nominal GDP)

those of other countries.

Exports led the recovery(Bubble boom)

(Large scale economic

140

150

1601993～1997

1999～2000

2002～2007（戦後最長の景気回復）

（大型景気対策）

（ITバブル）

14.0%

16.0%

18.0%

20.0%(Large‐scale economic measures boom)

(IT bubble)

（Longest economic recovery after WW II）

110

120

130

4 0%

6.0%

8.0%

10.0%

12.0%

Export Dependence of other countries(2007）Germany 46.7％ South Korea 46.4％UK 25 8％ Chi 41 3％

80

90

100

110

民間消費 住宅投資 設備投資 輸出 輸入

消費は

0.0%

2.0%

4.0% UK 25.8％ China 41.3％

France 26.9％ U.S. 11.9％

Export ImportPrivate consumption

Residential investment

Capital investment

Consumption:

70

80

備考：各期の最初の四半期の数値を100として指数化したもの。資料：内閣府「国民経済計算」から作成。

消費は

伸び悩み

11

Source：Cabinet Office “SNA statistics,” UN statistics.

psluggish growth

Note：Figure of each first quarter was indexed as 100.Source：Prepared from SNA (National Accounts of Japan), Cabinet Office, Government of Japan.

２．Background to the economic downturn① : Industrial structural change toward high value-added production○ Aft th l b l fi i l i i J ’ t d d d ti ll d J ’○ After the global financial crisis, Japan’s export decreased drastically and Japan’s economy entered into a full-scale recession.○ Japan’s exports shifted toward high value-added goods. Therefore, Japan’s economy was severely impacted by the global recession （The recovery of the globaleconomy was severely impacted by the global recession. （The recovery of the global economy may lead to a increase in production of high value-added goods.

Decrease of exports concentrated on highJapan’s export index of added value is increasing

20 （円ベース、前年比、％） 10月以降全品目が減少。Contribution to changes of export by item

Decrease of exports concentrated on high value-added goods such as automobiles, electric machinery and general machinery.

日韓輸出高機能化指数【総合】

( 年 ) 次 数値 09/4Export index of value added*:

Japan s export index of added value is increasing more rapidly than that of South Korea.

(Year to year,%)

その他 ‐13.910

0 

10 

（参考）鉱工業生産指数Index of Industrial Others▲13.9

130

140

日本

韓国

(2000年=100) (月次、原数値) 09/4South Korea and Japan (monthly)

一般機械 ‐9.4

電気機械 ‐7.3

自動車 ‐14 8

‐30 

‐20 

‐10 

輸出総額Production General

Machinery▲9.4Electric Machinery▲7.3

100

110

120

09/3

Japan Export Value

自動車 ‐14.8

‐60 

‐50 

‐40 1月 2月 3月 4月 5月 6月 7月 8月 9月 0月 1月 2月 1月 2月 3月 （年月）

45.5%

Automobiles▲14.8

▲45.580

90

100

Korea

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

12

08年1

08年2

08年3

08年4

08年5

08年6

08年7

08年8

08年9

08年10

08年11

08年12

09年1

09年2

09年3

（資料） World Trade Atlas

（年月）

General machinery: engines, PCs, etc.Electric machinery : semiconductors, VCRs audio equipment, etc.

資料：三菱UFJ証券

＊General Index created from prices of exports. When exports become more value-added, this index goes up through price increase.

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Source : Mitsubishi UFJ securitiesSource : World Trade Atlas

2008 | 20091 2 3 4 5 6 7 8 9 10 11 12 1 2 3

２.Background to the economic downturn②: ○ The large share of consumer durables (high value-added) in Japanese exports to the U S is a background of the huge decline in Japanese exports In contraryto the U.S. is a background of the huge decline in Japanese exports. In contrary, Chinese exports to the U.S. contains more basic goods (low value-added products).

※Change of export to US            Japan ‐46.1％(Mar 09 year to year US$) China 5 5％

In Japanese exports to the U.S., the share of automobiles is large.

(Mar. 09,  year to year, US$) China ‐ 5.5％

China’s U.S. exports are dominated by basic goods such as clothes and

miscellaneous goods

16,000 

日本の対米輸出の品目構成

その他

（百万ドル）（百万ドル）

40,000 

中国の対米輸出の品目構成

その他食料・資源

（百万ドル）(Million $)Goods component of Japanese exports to the U.S. (Million $) Goods component of Chinese exports to the U.S.

miscellaneous goods.

OthersOthersFood

2,940(5 6%)

2,787( 5 2%)

2,796(0 3%)

10,000 

12,000 

14,000 その他食料・資源衣類・雑貨鉄鋼製品化学製品一般機械

械

25,000 

30,000 

35,000  食料・資源鉄鋼製品化学製品輸送機械一般機械電気機械

OthersFood MaterialsClothes SteelChemicalsGen Mach

Food MaterialsSteelChemicalsTrans MachGen MachEl Mach

5,056 5,187 5,145

2,629(‐5.9%) 

2,509(‐4.6%) 

2,728(8.7%) 

1,627(‐40.4%) 

(5.6%)  (‐5.2%)  (0.3%) 

1,703(‐39.1%) 4,000 

6,000 

8,000  電気機械輸送機械

6 647

5,016(36.5%) 

5,787(15.4%) 

6,093(5.3%)  5,596(‐8.2%) 

5,538(37.8%) 

5,251(‐5.2%) 

5,293(0.8%) 

4,940(‐6.7%) 

5 000

10,000 

15,000 

20,000 電気機械衣類・雑貨El Mach

Transport Machines

Clothes

(6.5%)  (+2.6%)  (‐0.8%) 1,949(‐62.1%) 

, ( )

0 

2,000 

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3

5,490(10.9%) 

6,647(21.1%) 

5,870(‐11.7) 

5,913(0.7%) 

( )

0 

5,000 

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3

2006 2007 2008 20092006 2007 2008 2009

備考：数値は各年3月の値。括弧内は前年同月比。資料：米国商務省センサス局、経済分析局統計から作成。

備考：数値は各年3月の値。括弧内は前年同月比。資料：米国商務省センサス局、経済分析局統計から作成。

2006 2007 2008 2009

備考：数値は各年3月の値。括弧内は前年同月比。資料：米国商務省センサス局、経済分析局統計から作成。 13

Note : Figures are export values of March in each year.Parentheses are year on year change, %.

Source: Census Bureau, U.S. government

Note : Figures are export values of March in each year.Parentheses are year on year change, %.

Source Census Bureau, U.S. government

３．Converting crisis into opportunities ～ ①Market exploration of Asia and emerging economies○ The markets of emerging economies that have a rising middle-class offers Japanese companies great○ The markets of emerging economies that have a rising middle class offers Japanese companies great opportunities. ○ In such markets, however, the competition with South Korean and Chinese companies is severe. ○ In order to succeed, localization of product development and procurement, and recruitment of local staff are necessarynecessary.

Competition with Korean companies in the Chinese market, with Chinese companies in other emerging markets is getting severe

The Asian middle class market is drastically expanding.

9

10ベトナム シンガポール

香港 フィリピン

8.8億人

（億人）Population of Asian middle class Imports of emerging economies from main export

countries （2007）

other emerging markets is getting severe.

Russia6.2 times

(100 millionpeople)

Vietnam

Hong Kong

Singapore

The Philippines

88 millionpeople

6

7

8 マレーシア インドネシア

タイ 台湾

中国 インド

韓国

ChinaMiddle EastJ：JapanC：ChinaK：KoreaU：U.S.G：Germany

Malaysia

Thailand

China

South

ppIndonesia

Taiwan

India JKU

C UGJ

O

GCJO

3

4

5韓国

1 4億人

中国

4.4億人India

ASEANAfrica

G Ge a yF：FranceO：The other

countries

Korea China44 millionpeople

UO

C UGJO

0

1

21.4億人

インド

2.1億人BrazilIndia

21 millionpeople U

CGJ

O

CJ

UO

CFGJO

1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008

備考：世帯可処分所得5,001ドル以上35,000ドル以下の家計比率×人口で算出。資料：Euromonitor International「World Consumer Lifestile Databook 2009」から野村総合研究所作成。

Note： This figure shows imports of emerging economies from three main export countries, (Japan,) and "the other countries"

Middle Class: Population of households with disposable incomes ranging from $5,001～ $35,000

14

４．Converting crisis into opportunities～ ② Appealing for Japanese attractive points to the rest of the world○ It is important for Japan to disseminate its excellent/ leading technology (e g○ It is important for Japan to disseminate its excellent/ leading technology (e.g. environmental, energy saving and water disposal, technology) and culture (animation, fashion and sightseeing resources, etc.) abroad. Such exports can also help provide solutions to global problems.solutions to global problems.

The contents industry (except the game industry) has an import surplus. It is necessary 

Green FactoryA system which cultivates vegetables and fruits 

メディア・ソフト別の輸出入状況

to enter into world market which is 10 times the size of the market in Japan.

y gusing artificial culture and light, without soil. It is not affected by weather or injury by continuous cropping. 20 harvests per year are possible. Export 

t ti l i t Export & Import of Japanese contents(100 million

2,327

2000

2500

メディア ソフト別の輸出入状況（億円）potential exists. Export & Import of Japanese contents(100 millionYen)

export

660

331

1000

1500

輸出

輸入

import

68 26 45 10730288

145331

0

500

映画 ゲーム 音楽 雑誌 書籍

輸入

Movies Games Music Magazines Books

（資料）総務省情報通信政策研究所「メディア・ソフトの制作及び流通の実態

（2006)」

Sample ： Fairy Angel（Kitayama, Kyoto） 15

Source: Ministry of Internal Affairs and Communications, Institute for Information and Communications Policy, "Realities of Production of media software and circulation(2006)."

５．Converting crisis into opportunities ～ ③ Developing the future by expanding domestic demand ○○ Japan has a 300 trillion-yen consumption market and 1,500 trillion-yen in household financial assets. Taking consumer demand is inevitable for growth.○ Even in this economic crisis, there are many companies which ensure profit by i itingenuity.

Ch t i ti Fi ld d C iCompanies Actively Fighting the Recession

Characteristic Field and Companies

In-depth customerservice

Tokyo Disney ResortHiiragi-ya（high-class Japanese style hotel), etc.g y g p y )

High-quality, low price goods

UNIQLO, Nitori, Kappa-Sushi, etc.

New goods / services Blu-ray, Home-delivery DVD rental shops, etc.

Niche Market ROYCE’ （chocolate sold only in Hokkaido）Tombo (frozen jelly sold only in zoos) etc.Tombo (frozen jelly sold only in zoos) etc.

Solution for inconvenience or dissatisfaction

Maruetsu（Supermarket：home delivery）Nakamura Brace（orthopedic & rehabilitation devices） etc.

F i “i di id l B （Shi k i）Focusing on “individual market” rather than “mass marketing”

Benesse（Shinkenzemi）Sony Music Entertainment（reissued CDs) etc.

16

Chapter 3Global Economic Strategy and Foreign Economic Policy of JapanForeign Economic Policy of Japan 

Global economic strategy and foreign economic policy of Japan - The four prioritized fields

１ “D ti d f i i t t d ２ Promotion of innovation in the

p

１. “Domestic and foreign integrated economic measures”Japan as a trade-oriented nation, growth in foreign demand around the world is the greatest economic

２．Promotion of innovation in the “volume zone”The market development of the emerging countries is essential for the diversification of the investment destination. demand around the world is the greatest economic

measure.- Drive forward the concept of doubling the size of Asia's economy- Deterrence of protectionism (WTO Doha Round and Economic Partnership Agreements etc )

- Promotion of new innovation by low cost technology- Maintenance of the investment environment by investment-protection treaties and intellectual property protection-Encourage home remittances of profit on foreign investment

Economic Partnership Agreements, etc.)- International development of infrastructures-related businesses including electric power supply, transportation, water supply, services industries and contents industry

３．Global development of the low carbon revolution

４． Multi-layer cooperation including industrial cooperation with countriescarbon revolution

Aim to become a “problem solving nation“ tackling global issues.- Promotion of international energy conservation cooperation etc

industrial cooperation with countries rich in natural resourcesMultilayer development of industrial cooperation, etc. with resource countrycooperation, etc.

- Promotion of overseas market expansion strategy that centers on low carbon technology.

- Support resource countries by providing technologies, etc. - Strengthening international exchange in various fields as sightseeing and education, etc.

18

１． Domestic and foreign integrated economic measures○ Adding to domestic demand expansion, Japan will promote domestic and foreign i t t d i i i t ith A i b ti i f

（１） Drive forward the concept of doubling

integrated economic measures aiming to grow with Asia by promoting expansion of domestic growth of Asia, the “Growth center in the world.”

Industrial aorta between Delhi Mumbai

BIMP Wide area 

Mekong river valley synthesis development

8 days by landHanoi

●Delhi

● ●

（１） Drive forward the concept of doubling the size of Asia's economy‐ Cooperation in maintenance of the large area infrastructure and the social security system, etc. t d d ti d d f A i coordinative 

development

8 days by land and sea route

Bangkok●

●

Ho Chi MinhChennai

Mumbai

●

to expand domestic demand of Asia.‐ Promote economic cooperation with Asia such as system sharing is promoted (utilizing APEC 2010 in Japan). 

Mekong Indian industrial aorta

2 weeks by only sea route

●

Singapore

By utilizing the Economic Research Institute for ASEAN and East Asia (ERIA), establish the foundation for distribution infrastructure (industrial aorta etc ) aiming for market

IMT growth triangle zone

e.g. Approx. 2 weeks is needed to go from Ho Chi

(industrial aorta, etc.) aiming for market integration of east Asia. （Right figure）

Minh (Vietnam) to Chennai (India) via sea route of Strait of Malacca. When the land /sea route connecting Cambodia and Thailand is established, it will be shortened to 10 days and will be 8 days if Japanese traffic technology etc.June 3, 2008 and will be 8 days if Japanese traffic technology etc. were to be introduced .

Note: BIMP: Brunei, Indonesia, Malaysia, and the Philippines. IMT: Indonesia, Malaysia, and Thailand.

ASEAN board of directors when ERIA is established

19

（２）Promotion of trade investment liberalization and deterrence of

One Village, One Product activityl d d l l fliberalization and deterrence of

protectionism- Promotion of WTO Doha Round- Promotion of Economic Partnership

Implemented as a development support plan for developing countries by the WTO Doha Round promotion. Aimed to discover specialties of the developing 

i d f h d l fp

Agreements (EPA), etc. countries, and to foster the development of attractive commodities that can be bought also by foreign countries.

Measures for protectionismThe measures of the governments around the world that

A "One Village, One Product Market" is set up in Narita Airport and Kansai Int’l airport. It is an exhibition and spot sale featuring 380 articles from 36 countries.

Market in Narita Airport

The measures of the governments around the world that can influence export and the investment is increasing rapidly after the economic crisis. The understood protected trade measures goes up to about 130 by 30  countries. They took effect after Sep. 2008 

Market in Narita Airportwhich were against the declaration of the head of the London summit. Measures that Japan could be influenced  by amount to 24 by 9 countries.

Examples of trade measures○Introduction of Buy American articles (U.S.)○ Introduction of expansion of import permission system introduction (Argentina)

《example of commodity》

Tinplate bicycles※produced by recycled

permission system introduction (Argentina)○ 13% tariff raise in cross‐sectoral articles (Ukraine). ○ Tariff rate increase for cars and flat panel  ※produced by recycled

empty cans, etc. (Madagascar)

pTVs, etc. (Russia)

20

２． Promotion of innovation in the “Volume Zone”○ Aims market gain of interlayer segment (population about 880 mil.) of the Emerging market= “Volume Zone”Volume Zone○ Support enterprises that aim to gain in the “Volume Zone innovation” in areas of developing of the technology of lowering the cost while maintaining the quality of products /consulting in marketing approach method, etc.

Market structure Profit profile of enterprise

Product portfolio of Japanese firms (example of automobile )（１） Promotion of “Volume Zone Innovation”

High‐end

High interest（ Rolls‐Royce / Ferrari, etc. ）

‐ Developing technology of lowering the cost （local procurement and single function design, etc. ）‐Marketing for interlayer（Fostering local human resource, local R&D, etc. ）

＝ High interest profit

Strong field of Japanese 

firms

（２） Environmental maintenance for  licensed production

＝Upper middle‐end

（ Lexus / Infiniti, etc. ）

Low interest profit

firmslicensed production‐ Proactive  conclusion of investment treaty‐ Protection of intellectual property rights（ Anti‐Counterfeiting Trade Agreement : ACTA etc. ） ＝Middle‐end

（ Volume zone）profit

The profit creation is

（３）Encourage home remittances of profit on foreign investmentC ll ti f d li t t ti

Field with potential of high market growth in the 

future

（ Corolla /Fit, etc. ）

The profit creation is difficult if done alone by  single Japanese firm. （ Nano (Tata Co. 

(India)) etc. ）

‐ Cancellation of duplicate taxation‐Encourage home remittances of dividends from overseas subsidiary companies’ profit 

future 

＝Low‐end

21

３． Global development of the low carbon revolution○ Build foundation for framework in global cooperation in the energy conservation

d i t l d t th th l b l b i f th d l t fand environmental areas and strengthen the global basis for the development of a low carbon society.○ Additionally, promote an overseas market strategy that centers on low carbon technology etc which is one of Japan’s major strengthstechnology, etc. which is one of Japan s major strengths.

The next generation energy parks（１） Promotion of international conservation of energy cooperation

札幌市（北海道）札幌市（北海道）

六ヶ所村（青森県）六ヶ所村（青森県）

真庭市（岡山県）真庭市（岡山県）

of energy cooperation - The discussion in G8 led by Japanese initiative. - International Partnership for Energy Efficiency Cooperation （IPEEC）- Japan-China Energy Conservation and Environmental Forum

J U S ti i l di d i t l

Sapporo City (Hokkaido)

RokkashoVililage(Aomori Pre.)Maniwa City

(Ok P )

太田市（群馬県）太田市（群馬県）

出雲市（島根県）出雲市（島根県）

山梨市（山梨県）山梨市（山梨県）

真庭市（岡山県）

北九州市（福岡県）北九州市（福岡県）

- Japan-U.S. cooperation in leading edge environmental technology field

（２） Promotion of cooperation in environmental areas between industries

(Aomori Pre.)Izumo City (Tottori Pre.)

(Okayama Pre.)

Yamanashi City (Yamanashi Pre.)

Ota City (Gunma Pre.)

Ibaragi

North Kyushu City (Fukuoka P )

茨城県茨城県

玄海町（佐賀県）玄海町（佐賀県）

愛知県愛知県

開園（２００９年４月現在）

environmental areas between industries- Worldwide Japanese Business Alliance for Smart Energy etc.

Ibaragi Pre.

Aichi P

Pre.)

Genkai-cho(Saga Pre.) (opened as of

April 2009)

御坊市（和歌山県）御坊市（和歌山県）長崎県長崎県

阿南市（徳島県）阿南市（徳島県）

愛知県

Opened

*Th t ti k

Nagasaki Pre.

Pre.

Gobo City (Wakayama Pre.)

Anan City (Tokushima Pre.)

To open

G8 Energy Ministerial Meeting(May 2009, Rome)

*The next generation energy parks: Experience-based study facilities with equipment such as solar energy generation. Inventiveness that makes the best use of traits of each places can be seen.

22

４. Multi-layer cooperation including industrial cooperation with countries rich in natural resources○ In addition to top diplomacy to the resource countries, promote wide industrial cooperation as cooperation in universities and environmental, technical spheres, etc.

Main countries/cities of resource country visited by Prime

April and May 2007The Minister of Economy Trade and Industry

Main countries/cities of resource country visited by Prime minister and Minister of economy, trade and industry

(after 2007)（１） Ministerial‐level top diplomacy and dispatch of  public and private missions, and the promotion of concluding EPAs and investment treaties. 

April 2008The Minister of Economy, Trade and Industry （Kazakhstan）

The Minister of Economy, Trade and Industry （Uzbekistan, Kazakhstan, and Saudi Arabia）

（２） Support resource countries by providing technologies, etc. and build reciprocity relations. 

February 2009Prime Minister （Russia）

June 2008The Minister of Economy, Trade and Industry （Saudi Arabia Kuwait and Iraq ）

In June, 2008The Minister of Economy, Trade and Industry （UAE）

（３） Strengthening international exchange in various fields as sightseeing and education, etc.

（e.g.）Make presentation at the largest travel exposition in Dubai

April 2007Prime Minister （Saudi Arabia）

（Saudi Arabia, Kuwait, and Iraq ）

November 2007The Minister of Economy, Trade and Industry （South Africa and Botswana）

June 2008The Minister of Economy, Trade and Industry （Brazil）

‐ Make presentation at the largest travel exposition in Dubai.‐ Establish direct flight from resource countries to  Japan.‐ Introduce  Japanese education system , which has a high 

reputation, into  the Middle East.

August and September 2008 Senior Vice Minister of Economy, Trade and Industry ※ Combination with the Ministry of Foreign Affairs （Botswana, Mozambique, Madagascar, and South Africa）

December 2008: Attended the London Energy Ministerial Meeting. April 2009: Sponsored Asian Ministerial Energy Roundtable Meeting. May 2009: Attended the G8 Energy Ministerial Meeting.

In April 2009, Asian Ministerial Energy Roundtable 23